Seven Basic Quality Management Tools

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Seven Basic Quality tools documents

Definition of Quality Management -- it is a method for ensuring that all the activities necessary to design, develop and implement a
product or service are effective and efficient with respect to the system and its performance. It is also a principle set by the company
to endure the continuous advocacy of quality services and products, or the further improvement of it.

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IMPROVING CUSTOMER
SATISFACTION IN THE SERVICE INDUSTRY

USING FAILURE MODE
& EFFECTS ANALYSIS

Debbie
Vermilion

Original
text on www.freequality.org

Introduction

Repetitive
failures cost companies millions of dollars in redesign costs, liabilities, and
transaction costs. However, by far the most serious cost of these failures is
the lost business that results from customer defection. For service companies,
the task of providing error-free services is even more challenging because
their intangible nature renders subjective perceptions of quality. Equally
troublesome is the uncontrollable element of customer participation in the
service process because production and consumption occur as a simultaneous
process. Despite these challenges however, service quality and customer
satisfaction are closely related constructs. When service providers continuously
strive to develop error-free processes, customer satisfaction is sure to
follow.

What is FMEA?

Failure
Mode and Effects Analysis
(FMEA) is a logical, proactive technique that is used to identify and eliminate
potential causes of failures. The technique was first used in the aerospace
industry to find problems with an aircraft before it ever left the ground.
Today, FMEA is in widespread use by a multitude of industries, many of which
have begun imposing FMEA standards.

In
the services industry, FMEA is critical because once a service encounter has
occurred (and resulting customer dissatisfaction has ensued), any corrective
actions taken by the service provider will likely be futile. With FMEA,
potential failure modes in the process are identified in anticipation of
the service encounter. In this way, the potential for errors is reduced or
eliminated, allowing for only the smallest probability of customer
dissatisfaction.

What steps should be taken
to conduct a FMEA?

Once a service provider decides FMEA is the right choice,
the following ten steps can be used to guide the implementation process:

Select
a service process to be analyzed

Define
responsibility (team, engineers, designers, developers etc)

Flow-chart
the process

List
and describe all failure modes at each step in the process

Perform
a criticality assessment by determining the risk level for each fault by
failure probability or severity of failure

Rank
the faults in terms of priority

Design
changes to reduce the risk of the highest priority failure modes

Specify
outcome measures and criteria to determine the success of the changes

Specify
a time frame

Implement
the changes and evaluate

Design
changes should continue until all possible causes of failure have been reduced
or eliminated. As mentioned earlier, while FMEA can technically be performed
at any stage, ideally it is performed at the process design stage. This way,
potential problems can be identified and prevented before the process is
put in place.

What potential rewards can
FMEA provide?

Service
companies who frequently conduct FMEA’s and evaluate their success typically
experience:

Minimized
customer defection/increased customer satisfaction

Increased
consistency in service quality

Reduction
of costly design changes

Reduced
transaction costs/increased profits

Reduced
liability

What are the advantages of
using FMEA versus other methods?

FMEA
is differentiated over other types of failure analysis methods in that it is
particularly adept at:

Identifying
cause and effect of known and potential failures before
they occur

Providing
documentation of failures which can be tracked over time

Making
accountability easier to pinpoint

Facilitating
continuous improvement

Creating
a common language that can be easily understood by both technical and
non-technical people in the organization

FMEA in
practice: Six Sigma Qualtec

An
investment management firm providing a transactional web site to 401(K) plan
participants received numerous complaints from clients who could not make
informed investment decisions because the web site was not being updated in a
timely manner. Mutual Fund Asset Value updates, for example, were late 35% of
the time. The firm identified non-value added steps in their web site update
process, using process maps, FMEA, measurement system analysis, ANOVA,
multi-variable analysis and process control systems. The non-value added steps
were eliminated, and manual reconciliation was automated. Eventually, the firm
outsourced a standardized process to a third party web administrator, which
yielded $100,000 in net savings. At-risk revenue retained through client
satisfaction was $5 million.